This presentation highlights Characteristics of Luxury Products and comparison of 2 luxury brands, Gucci and Louis Vuitton with respect to: PESTLE Analysis, 5 force model, SWOT etc.

2. Characteristics of Luxury
Products
Brand Symbolism
Extraordinariness
Rarity
Price as an benefit
Quality
Access to niche markets

3. PESTLE Analysis
Political
Law and security processes to be considered
Certification and product forms
Taxes to export and import luxury goods
Economic
Industry not affected by the crisis
Growing market with rising incomes
Consumption rising in growing economies
Social
Concept of power and superiority
Creation of charities and giving back to the society

4. PESTLE Analysis
Technology
High weightage given to R&D, new technologies of production and raw material sourcing
Promotion of the brand
Legal
Patents
Intellectual property for creation of sign and symbol of the brand
Placement of stores
Décor and organization of the store
Environment
Luxury goods do not adopt their products and trends to the new aspects of the environment

6. Threat of new entrants : HIGH
Brand loyalty
Scale Economies
Capital Requirement
Potential Retaliation from existing
brands/companies
Threat of substitutes : MODERATE
Price of substitutes
Quality of substitutes
Switching costs to customers

7. Buyers Bargaining Power : LOW
Number of buyers relative to suppliers
Level of dependence on a buyer
Switching costs
Possibility of buyers vertical integration
Suppliers Bargaining Power : MODERATE
Number of suppliers relative to buyers
Level of dependence on a supplier
Switching Costs
Possibility of suppliers vertical integration
Effective Substitutes
Rivalry among existing companies : HIGH
Competitive Structure
Demand Condition
Exit Barriers

8. • House of Gucci is an Italian fashion label
• Known for Accessories and Clothing
• Since 1921
• Family repercussions – Quickly grew out of it –
Now owned by Pinault-Printemps-Redoute (PPR)
• Ranked 8th by Forbes
• Brand value: $9.45 billion

9. STRENGTH
• Widely Available (DoS)
• Unaffected by economic crisis
• Diversified and wide product
range
• Public relation
WEAKNESS
• Instability of management
• Financial base is weak and
alarming
• Mass producer of prestigious
goods
OPPORTUNITIES
• Mergers & acquisitions
• Sustainability
• Diversification in Wine and
Spirits
• Emerging luxury markets in
Asia
THREATS
• Counterfeiting
• Strong Competition

10. • French fashion company
• Since 1854
• Most Valuable Luxury Brand
• Known for Leather Goods
• Monogram and Damier canvases
• Department stores and boutiques
• Brand value:$23.58 billion

11. STRENGTH
• Brand name
• Experience
• Premium quality
• Public relation
WEAKNESS
• Diversification
• Conflict of interest
• Sensitive to economy
OPPORTUNITIES
• Mergers & acquisitions
• New consumer trends
• Emerging markets - Asia
THREATS
• Competition
• Consumer taste change

12. VS

13. STAR
* Fragrance (G)
*Leather goods (LV) * Leather
goods (G)
QUESTION MARK
* Watches (LV)
* Jewellery (G)
CASH COW
*Fashion (LV) *Accessories (G)
* Fragrance (LV)
* Jewellery (LV)
* Ready to wear (G)
* Shoes (G)
DOG
* Wines & Spirits (LV)
* Watches (G)